Europe/Middle East

  • The U.K.'s budget deficit is down, but not gone as forecast.

    A U.K. Budget Deficit Primer

    The final Budget before the general election is fast approaching. Separated from the election by just 50 days, it is not likely to lack political content. But the key issue remains the deficit – and how successful George Osborne can claim the government has been at tackling it.

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  • Can a new Chancellor be the UK's fiscal policy answer?

    Austerity's Lingering Effects on the UK Economic Recovery

    The British economy has not been a pretty sight in recent years. GDP per capita was 15.8% lower in 2014 than we would expect from historical pre-2008 trends. Austerity has certainly played a role in this poor performance, but is George Osborne right to say that things would have been even worse if the pace of fiscal consolidation had been slower? And can we expect a different fiscal policy if a new chancellor comes into office following May’s general election?

    Austerity past and present

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  • Russia's capital flight surge increases its economic challenges.

    Russia: Capital Flight Surges

    Amid a spreading climate of fear in Russia, underscored by the late February assassination of Boris Nemtsov, Russians with something to lose are increasingly trying to find safe havens abroad for their assets.

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  • The split within Syriza is ruining their plan.

    Greece's Green Party Split Resurfaces and is Hobbling Syriza

    In the 1980s and 1990s, there was a split in the Green Party in Germany. The fundis were very principled and doctrinaire.  The realos were more interested in sharing power to shape policy.  For them, unlike the fundis, political expediency need not be a crime. 

    Arguably, all significant political movements have a similar split.  In any event, this split seems to be hobbling Syriza, which faced an arduous task in any event. 

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  • Greece's four-month extension will go by fast.

    What Happens at the End of Greece's Four-Month Extension?

    The world breathed a sigh of relief when Greece accepted a four-month extension to its current bailout programme on February 20. After much political rhetoric to the contrary, newly-elected Syriza promised to continue with reforms. The deal is such that the vital last injection of cash that is propping up its economy – worth €7.2 billion – will only be delivered when these reforms are in action.

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  • Kyrgyzstan is acutely dependent on remittances from migrant workers in Russia.

    Kyrgyzstan’s National Bank Governor Analyzes Effects of Russian Downturn

    The fallout from Russia’s economic downturn is forcing Kyrgyzstan to spend its limited reserves to fend off speculators and ease pressure on its currency, National Bank Governor Tolkunbek Abdygulov tells Abdygulov is using the crisis to try to strengthen rules for the Central Asian country’s under-regulated financial sector.

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  • A German Europe or a European Germany?

    Understanding the Divide Between the German Workers and Elite

    The differences between Eurozone members tend to be a key focus for investors and policy makers.  There is another fissure which is typically is under-appreciated.  It is within Germany itself and not discussed in polite company.  It is the divide between German workers and the economic elite.

    The German economic model, under which it exports 40% of everything it produces, presupposes a highly disciplined work force, where employers keep the lion's share of productivity gains, fiercely resisting increases in unit labor costs.  

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  • Greece's parliamentary decisions are the key to its future.

    Greece's Toughest Sell May be to its People

    It seems everyone has reservations about the Greek proposals.  However, the European Commission, the Euro group of finance ministers and the heads of state, including Merkel, seem somewhat more supportive than the ECB and IMF.  National parliaments will likely grant their approval in the coming days.  

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  • Egypt is poised for accelerating growth, but now must deal with the IS.

    The IS Threatens Egypt's Economic Growth

    Egypt has found itself caught up in the fight against Islamic State (IS). Following the recent execution of 21 Egyptian Christian hostages by IS in neighbouring Libya on February 15, the Egyptian army sent its air force to attack Islamic State bases there. This marks a significant escalation of Egypt’s involvement in the fight against IS in the region.

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  • Russia's economic cold is catching in its former satellites.

    What's Bad for Russia is Bad for Former Soviet Satellites

    Plummeting oil prices, conflict over Ukraine and the West’s imposition of sanctions have contrived to send the Russian economy into a tailspin. But it is not just Russia that is suffering – the economic downturn is having a ripple effect well beyond its borders. A group of 15 countries that once formed the Soviet Union, with a collective population of nearly 300m, are all suffering due to the slowdown in Russia.

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